Bitcoin prices were trading at levels not seen since August on Saturday, as a selloff of perceived riskier assets spread to cryptocurrencies. Bitcoin has now shed more than 50% from its record high in November
Bitcoin BTCUSD, -4.02% fell as low as $34,042.78 Saturday, a drop of 7.2%, before paring losses. Other digital assets also slid, with Ethereum ETHUSD, -6.47% down 12%. Solana and Cardano each fell at least 17%, according to Coinbase.
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The declines followed a volatile session on Wall Street on Friday that saw stocks swing from early gains to a selloff, as investors repeated this week’s pattern of selling rallies, pushing the Nasdaq Composite COMP, -2.72% deeper into correction territory.
“The pessimism continues to grow among investors and traders when it comes to riskier assets and this is chiefly influencing the price of equities and bitcoin,” said Naeem Aslam, chief market analyst at AvaTrade, in a note to clients.
“The thing with bitcoin is that when it begins to fall, the price action drops like there is no tomorrow,” said Aslam, who added that January also tends to be a volatile month for the cryptocurrency on a historical basis.
Aslam also cited a proposal from Russia’s central bank on Thursday to ban the use and mining of cryptocurrencies. Russia is one of the world’s leading bitcoin mining locations, and joins China, which imposed its own ban on activity last year.
“Many altcoins are into support at their summertime 2021 lows, making it critical that bitcoin holds support as it sets the tone for the cryptocurrency space,” Katie Stockton, managing director of Fairlead Strategies, a technical research firm, wrote in a Friday briefing. Stockton assigns a 30%-70% probability of a continued breakdown below current BTC price levels.